Question Two (18 points) Use the information below to prepare the statement of cash flows using the direct method. JABAL AL-SHAIKH COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2021 Cash 2021 2020 Accounts receivable $2,500 $4,000 Short-term investments (Available-for-sale) 103,000 97,000 96,000 Inventories 121,000 91,000 54,000 Prepaid insurance 4,000 6,000 Ski equipment 89,000 43,000 Accumulated depreciation equipment -23,500 -18,000 Patents 79,000 83,000 Total assets $441,000 $390,000 Accounts payable 92,200 75,000 Income taxes payable 21,800 15,700 Wages payable 4,000 9,000 Short-term loans payable to bank 23,500 0 Long-term loans payable 75,000 125,000 Common stock, $1 par 100,000 100,000 Additional paid-in capital 20,000 20,000 Retained earnings 104,500 45,300 Total liabilities & stockholders' equity $441,000 $390,000 JABAL AL-SHAIKH INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2021 Sales Cost of goods sold Gross margin Operating expenses Operating income Interest expense Loss on sale of equipment Income before income tax Income tax expense Net income $540,200 302,000 $238,200 94,000 $144,200 20,500 4,000 24,500 $119,700 40,500 $79,200 Additional information: 1. Depreciation expense and amortization expense are included in operating expenses. 2. Equipment that had a cost of $25,000 and was 20% depreciated was sold during 2021. 3. Cash dividends totaling $20,000 were paid. 3